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City Proposes Raiding Street Repair Fund to Close Budget Gap

At the June 6, 2017 City Council meeting, City Manager Ben Siegel disclosed a projected $1.2 million budget deficit in the ending balance for Fiscal Year 2017.

$600,000 earmarked for pothole and other street repairs was instead deposited into the general fund to plug a $1.2 million deficit.

City employee costs account for approximately $12 million of the $27 million annual budget. The city manager’s compensation package with benefits totals $312,000 per year. Siegel also created a new position for an "Assistant City Manager" which costs taxpayers more than $256,000 per year with benefits. In addition, the city manager added another Administrative Specialist/Assistant position with a compensation package of approximately $100,000, with benefits. The total compensation for just the city manager’s office alone totals approximately $668,000, not including monies spent on new furniture, including flat screen TVs.

Siegel however, blames a majority of the problem on rising compensation costs for the Orange County Sheriff’s Department (OCSD) contract, which increased approximately 10% over the prior year. It increased by $476,000 in 2017 for a total cost of approximately $10 million.

According to the city manager’s budget agenda item, in addition to the Sheriffs’ contract increase, sales tax is forecast at $362,000 less than anticipated, and development fees/ charges are projected to be $251,000 less due to the delay of projects that were expected to move forward in 2016-17. The City also experienced an increase in animal control costs of $130,000, and $50,000 in storm drain costs.

To solve this shortfall, the City Manager proposes to move $600,000 to the General fund from the "Landfill Mitigation Fund" the City Council negotiated with the County to remediate impacts to Ortega Highway from trash trucks. The City Council had directed that the fund proceeds be earmarked for maintenance of City roads and streets.

The problem with the plan to redirect the proceeds into the general fund say critics, is that many of the City’s roads and streets are experiencing structural failure due to the lack of timely maintenance. Potholes remain unfilled throughout the City because of lack of funding. The City continues to fund and increase employee salary and benefits while claiming there is not enough money to provide adequate street maintenance. Most experts agree the prompt filling of potholes and a well-funded preventative maintenance program of sealing streets not only extends the life of asphalt, but actually saves money in the long run and increases driving safety. Residents in various neighborhoods have expressed frustration over poorly maintained streets.

Earlier this year, the City Manager informed the City Council that the City has a growing structural budget problem where expenditures are increasing faster than revenues. His memo indicates that this makes it increasingly difficult to balance the budget without annual cuts in programs and services.

To date, the City budgeting process has been staff-driven, with little actual transparency as to who sets the priority for funding. Adding to the problem is the City Council’s apparent inability or unwillingness to attack the budget issues or to say no to the city manager, in order to bring about long-range solutions. During a recent council meeting, Council member Pam Patterson moved to require a monthly report to the council with more details on expenditures however, it failed for lack of support from her fellow council members.

Few can argue that when faced with a looming deficit, the City should impose salary and benefit freezes for all employees. Since personnel costs, including contracted services, amount to an estimated 80% of the budget, a sizeable reduction in budget expenses should include an overall reduction of staff instead of relying on one-time projects, or raiding street maintenance funds. Instead, the city manager recommended raiding the street maintenance funds.

Suggestions for meaningful budget reductions that will allow the City to function while protecting the residents with safe streets include;

1. Eliminating the City’s funding for the OCSD Resource Officer at San Juan Hills High School, saving SJC taxpayers $300,000 per year. This expense should be borne by the school district, not SJC taxpayers especially since students from neighboring cities also attend the school, but do not pay for the officer.

2. Reduce City Staff by 3 Full Time employees, at a savings of approximately $250,000 per year.

The money saved from these reductions could then be applied to their originally intended uses, such as using the $600,000 Landfill Mitigation Fund for street maintenance as directed by the previous council majority. If currently budgeted funds from the Arterial Streets Major Rehabilitation Program (CIP #18109) are added, this would provide an additional $421,000 for a total of $1,021,000 for badly needed street maintenance.

Should the city cut back on employee or other expenses in order to provide promised street maintenance? The CCS wants to hear from you! Email us at: eboard@ccsense.com. Names will not be printed without permission.

2 comments:

Matt Gaffney
said...

So how much has the city had to spend on Attorney fees during this same period? Most if not all of these lawsuits have been brought on by CCS. How about Kim McCarthy & Eva Crabbs trying to sue the city for $500,000? As always CCS only prints the items to bolster their opinions. As always, unbiased cracker jack reporting by CCS.

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Capistrano City Hall Compensation

With high unemployment levels and with our City's debt at over $100 million, reigning in City costs is more important than ever. In a recent CCS article, we published a detailed list of City Hall compensation and benefit expenses by position and employee. You can view the details yourself and decide whether you think this is a good use of scarce taxpayer dollars.